An anomaly between the effect of National Insurance contributions on personal and occupational schemes could jeopardise enhanced protection status for personal plans, says Abbey for intermediaries.
The company's interpretation of the rules shows that where an NI rebate is paid into a personal pension scheme after A-Day, enhanced protection is invalidated.
Abbey is calling for the rule – which does not apply to occupational schemes – to be changed.
It says IFAs can ensure that rebates stop from A-Day by completing form APP2 and returning it to the National Insurance Contributions Office Services to Pensions Industry.
Head of pensions and ret-irement Mike Brown says: “In the run-up to A-Day, IFAs need to advise their clients with personal pensions on the steps they must take to protect their pen-sion funds against the lifetime allowance.
“This involves withdrawing from active membership of whatever scheme they are a member of and stopping contributions.
“The National Insurance Contributions Office has a backlog of payments and often these can be forg-otten both by advisers and their clients. Usually, the arrival of a long forgotten rebate is a bonus but not if it invalidates enhanced protection.”